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St. Luke’s: Good for Idaho’s Bottom Line

By Dr. David C. Pate, News and Community
March 18, 2013

Quick quiz!

St. Luke’s:

  1. Works to improve the health of people in our communities.
  2. Works to make employees of Idaho companies healthier and therefore, more productive.
  3. Makes available good-paying jobs to more than 11,000 of the region’s residents. All St. Luke’s jobs pay more than minimum wage.
  4. Makes construction work available when few others are building, such as we did during the most recent economic downturn in Idaho.
  5. All of the above.
Yes, all of the above. According to a study sponsored by St. Luke’s, we provided nearly $2.5 billion in benefit to the state of Idaho through the multiplier effect of all of our direct and indirect activities. 

Opening day at St. Luke's Nampa Medical Plaza. Our facility has drawn rave reviews in its first year.

Let me explain the findings of the study, which was completed in January by Steven Peterson, a clinical assistant professor in economics from the College of Business and Economics at the University of Idaho.

Because Boise is a medical services hub for south central Idaho, eastern Oregon, and northern Nevada, we attract patients and their families to Boise. These folks buy food, gas, lodging, and other goods and services while they are in and around Boise, contributing to the local economy. 

And because St. Luke’s has a significant presence in Twin Falls, Jerome, Wood River, and McCall, fewer residents of those communities leave to travel to Utah, Oregon, and Washington for their care, which keeps a lot of economic activity in Idaho that otherwise likely would have gone out of state. 

After we acquired the Magic Valley hospital in 2006, we built a new, more than $240 million medical center, and relied primarily on local contractors, vendors, suppliers, and other workers to complete the job. The project represented a significant investment in the local economy during the worst of our country’s recession.

We also have recruited 72 new physicians to the Magic Valley area. Now, people from the surrounding eight counties are remaining in the Magic Valley to receive their care in far larger numbers than before. In the past, many people have felt the need to travel to Salt Lake City for their care. Now, that economic activity remains in our state, and patients have much greater convenience and minimal travel costs.

And the benefit builds exponentially with all of our local contribution, no matter the community.

St. Luke's Magic Valley is succeeding with convenient, state-of-the-art care so folks don't have to travel far from home.

As the author of the report pointed out, “The substitution of local services for an imported service represents an increase in the demand for local business services. Keeping income in the community enhances the multiplier effects …”

In addition, St. Luke’s contributes to our local economies by employing people in jobs that offer competitive wages and pays payroll taxes on those wages. The wages that are paid then allow employees to be local homeowners who buy services and products close to home. St. Luke’s employees, in turn, pay taxes that support additional local, county, and state jobs and investments.

I’ve written previously on my blog about St. Luke’s efforts to support other nonprofit organizations in our communities that promote health and wellness, offer programs for women and children, and otherwise strengthen our shared community life.

We believe that access to excellent health care services in the communities where a business’ employees live makes those areas more attractive in their efforts to attract new businesses to their communities. 

Here’s just one example of how it works. We know that local and state leaders did great work to successfully recruit the Chobani yogurt company to the Magic Valley, but I have to think that having a brand new, state-of-the-art medical center in the community played a role in Chobani realizing that the Magic Valley is the perfect place for their new plant.

The bottom line? There are nearly 2.5 billion contributions St. Luke’s Health System makes to Idaho’s bottom line.

About The Author

David C. Pate, M.D., J.D., is president and CEO of St. Luke's Health System, based in Boise, Idaho. Dr. Pate joined the System in 2009. He received his medical degree from Baylor College of Medicine in Houston and his law degree from the University of Houston Law Center.